A strong August trading run has ended with two attention-grabbing stock splits. Tesla (NASDAQ:TSLA) and Apple caused outages on several popular trading platforms as investors rushed to buy up shares before enthusiasm carried the price higher.

Yet, now that the rush has calmed, is Tesla stock still worth it to buy?

Strong demand feeds strong sales

Electric car manufacturer Tesla split both its share price and ownership in five, bringing its previously sky-high share price of $2,230 down to a more accessible $446 on Aug. 31. Stockholders who previously held just one share now own five. 

In fact, despite the appearance that the stock split creates, Tesla is still worth the same -- and that's good news. 

Tesla Model Y car on road

Image source: Tesla.

The company has multiplied its revenue by six over the past five years, bringing total revenue up from $4 billion to $24 billion at the end of 2019. Gross profit has likewise increased from $924 million to $4 billion. Even though the company has posted net losses for years, the second quarter of 2020 marked Tesla's fourth quarter of sequential profitability.

The problem with the company is not a question of demand; Tesla simply does not yet have the smooth production capabilities to churn out technology-forward electric vehicles at a consistent rate. But that issue can be ironed out with time as the carmaker improves its operational scale and efficiency.

Even more enticing is the launch of Tesla's highly anticipated Model Y, a compact SUV that starts around $50,000. Unfortunately, the Model Y launch coincided with the outbreak of the coronavirus pandemic, and the factory had to pause production for two months in early 2020. Even so, Model Y demand is high with a planned production volume of 1,000 units per week, and Tesla exited the second quarter of 2020 already running at full production capacity for its newest model. 

Future expansion spells high growth potential

Now that Tesla trades at a fifth of its previous share price, smaller investors looking for a slice of the pie more readily perceive themselves as being able to buy-in. Why is this important?

Render of Tesla's future factory in Berlin

Image source: Tesla.

The company is headed toward expanding its affordable product line-up even further as its product mix shifts more solidly toward the Model 3 and Model Y. Tesla's pricier models fell from 17% of all vehicles produced in 2019 to 15% by the first quarter of 2020, while Model 3 and Model Y production increased three percentage points over the same period.

Ultimately, splitting its stock mirrors Tesla's act of making its products more accessible. Not only does this create an opportunity for shareholders with more limited funds to buy in, but one could say it also creates a greater buzz among consumers looking for an accessible "luxury" product. Tesla itself has lowered the bar for entry while still maintaining its standards, so those on the fence have even more reason to buy than before. 

This, in a way, creates a cascading effect that can serve as a great catalyst for the company. Take Tesla's Model 3, for example. The launch of the Model 3 in China met strong demand, quickly becoming the best-selling electric vehicle and competing with mid-sized premium sedans such as the BMW 3-Series and Mercedes C-Class. Similarly, in the U.S., the Model Y launch generated such strong demand that it outstripped the previous demand curve for the Model 3. Ultimately, this similar brand perception and accessibility in all of Tesla's markets could spell some seriously exciting prospects for the future. 

What's the bottom-line choice?

The Tesla 5-for-1 stock split is beneficial both for the company and for its shareholders. The company has enjoyed increasing sales, increasing profitability, and increased attention for its forward-looking products, and there is little sign that demand could weaken soon. 

In the end, it seems clear that Tesla will continue to grow and change with the times. The company expects to continue expanding, with plans already in the works to build out production capacity for its most recent launch. There is even the possibility that Tesla may become part of the S&P 500 Index soon, which itself would likely spark some wild trading. So while some growing pains are inevitable, now seems like a great opportunity for bullish investors to buy this tech stock and support such an intrepid company.